Louis-Ferdinand Céline, a French author of minor note, wrote a novel in 1936 whose title was translated into English as Death on the Installment Plan (Mort A Credit for you Francophiles). Now, in the world of rental, we are seeing the advent of furniture rentals on the subscription plan both in the United States and elsewhere.
The once relatively pure RTO concept continues to evolve as entrepreneurs bend and twist the transaction into new and creative forms designed to enhance the rental concept for a broader base of consumers. There was, first of all, the “rent to rent” concept pioneered by furniture companies like Cort, Grantree, Brook Furniture Rental and others. That concept is still around here and there in the furniture world (and in the musical instrument world as well). The pitch was the convenience for business customers who were in a temporary location for an extended period. Those customers could rent an apartment, instead of having to stay in a hotel, and the furniture rental companies would furnish it for them in as elegant or as Spartan a fashion as the customer might desire. There was no talk of ownership and no ownership options, although if the executive fell in love with the desk or the coffee table, the company could certainly have been persuaded to sell it. However, owning the furniture was not the point; using the furniture for a while with a minimum of fuss and bother was the point.
It seems that Americans really like owning stuff, and they at least want the option of owning the stuff they rent. That impulse has not changed in the last 50 years and is unlikely to change in the next 50.
Even with the dominant presence of RTO, some new rental ideas are floating around that challenge traditional thinking about rental. IKEA, for example, has just announced that it is test marketing a rental subscription concept in some of its stores in Switzerland. The IKEA test allows customers to rent selected items for three months. At the end of that time, customers can buy the furniture at a discounted price, return the furniture for a $25 fee, or swap the furniture for some different furniture. IKEA executives like the idea that their products can have an extended life if customers return furniture they no longer need or want, and the company can fix it up and make it available to another customer. The company pitch has an ecological theme of cutting down on waste as well as providing choice and convenience for customers.
Another company with a rental subscription model is Feather (www.feather.com) with stores for the time being in New York City and San Francisco. The company offers generic items, for example, gray sofas, wood coffee tables and black counter stools. The pitch is to peripatetic millennials who are more concerned with lifestyle than nesting. These customers move around a lot, have a fear of commitment, to people, certainly, and perhaps to things as well, and are more interested in being able to use stuff than own stuff. You can check how the company prices its program in the article, “There’s A Rent The Runway For Furniture—But Is It Worth It? We Did the Math,” published by Refinery 29 online.
Other companies with a “subscription rental” model include Fernish, Swivelfly for office furniture rentals, and Kamarq, a Japanese company offering modular furniture rental items.
The furniture rental space is evolving in an effort to attract a larger customer base. Some of these entrepreneurial experiments will likely succeed; others not. Traditional RTO dealers will want to follow the latest innovations and perhaps imitate parts of the successful ones in their own stores. Who after all does not want more customers these days?
Ed Winn III serves as APRO General Counsel. For legal advice, members in good standing can email legal@rtohq.org.
